Britain to boost infrastructure investment for growth

LONDON, March 20 (Xinhua) -- British government has on Wednesday announced a package of new measures to help boost economic growth in its 2013 Budget plans.

According to Chancellor George Osborne, the package included increasing investment spending, promoting new home sales and lowering Corporation Tax rate,

Delivering the Budget in the Commons, the British finance minister said the government would earmark an extra 3 billion pounds (4.54 billion U.S. dollars) a year to infrastructure projects in a bid to spur economic growth.

Osborne promised the increased fund would be ready from 2015. Of the total, 15 billion pounds will be used in the next decade on roads, railways, power station and others.

"By investing in the economic arteries of this country, we will get growth flowing to every part of it," he said.

Osborne also revealed the New Help-to-Buy scheme for those struggling to find mortgage deposits will include a Government interest-free loan worth 20 percent of the value of a new build house. The scheme will help homebuyers, including those buying new home

The extra money is to come from further cuts to government spending. It is reported that Osborne had required various government departments' heads on Tuesday to make extra spending cuts of 2.5 billion pounds.

Local media described Osborne as scrambling money in one of the bleakest Budgets in years.

-- Corporation Tax rate cut to 20 percent from April 2015, while abolishing different rates. Levy on bank balance sheets raised to 0.142 percent from next year.

-- Public sector pay rises to be limited to 1 percent for a further year to 2015/16. Armed Forces to receive full recommended increase in "X-Factor" payment in May and be exempted from changes to progression pay.

-- There will be an updated remit for the Bank of England's monetary policy committee. The 2 percent CPI inflation target will remain.

According to Osborne Budget statement, the independent Office for Budget Responsibility (OBR) now expects the economy to expand by 0.6 percent in 2013, downgraded from 1.2 percent made in December, and 1.8 percent in 2014.

The OBR then expected the recovery to pick up to 2.3 percent in 2015, 2.7 percent in 2016 and up to 2.8 percent, and forecast that the country would escape recession this year.

The OBR's estimate for employment was revised up, with 600,000 more jobs expected in 2013 than this time last year.

The Chartered Institute of Personnel and Development (CIPD) has welcomed measures set out in the Chancellor's Budget, saying it would help more people get a foot on the employment ladder, make it easier for those who've been sick to return to work when they are able, and to help those in work plan with confidence for their retirement.

"The economic forecast released today alongside the Budget contains few surprise," said Mark Beatson, Chief Economist at the CIPD.

"The very difficult situation in the eurozone casts a long shadow over the Britain because of our close trade relationships with Europe so halving the growth forecast for 2013, to 0.6 per cent, was to be expected."

"The difficult fiscal situation gave the Chancellor little room for maneuver," he noted.